Hydrogen is known for its explosive properties, as well as an ability to rise faster than hot air.
Nowhere was this better illustrated than on Friday, when a very low-key media release from Energy Minister Guy Barnett announced that the second round of grants from the Renewable Hydrogen Industry Development Fund were up for grabs.
This $50 million bag of Tassie taxpayer incentives comes on top of $70 million in Federal funding for the Tasmanian Green Hydrogen Hub, and another $200,000 in ‘seed funding’ the State Government has poured into the Bell Bay Advanced Manufacturing Zone to keep alive its grand Tasmanian Renewable Hydrogen Action Plan.
Last year, $2.6 million in State funds were granted to three major companies, all part of the hard-hat-and-hi-viz hype that surrounded Guy Barnett’s loud claims that Tasmania was set to become a global supplier of green hydrogen.
Fortescue, Origin, Grange Resources and Woodside were inflating huge hydrogen balloons, talking of 250, 300 and 600-megawatt pilot plants that would soon be producing 250,000 tonnes of green hydrogen or green ammonia per year.
Last year’s round of government give-aways was only open to those big league players with 100 – 500MW ambitions. However, expectations have been lowered, like the sagging balloon from yesterday’s party.
“The first round of the program supported feasibility studies by Grange Resources, Origin Energy and ABEL Energy, all of which have found strong potential for the industry in Tasmania,” said Mr Barnett.
What the ‘feasibility studies’ discovered was the same harsh reality of 2021, when a very buoyant Andrew Forrest had his hydrogen bubble burst by then-Hydro chief Evangelista Albertini. In what proved to be his last official statement, the CEO had the temerity to contradict the Energy Minister, telling Forrest the truth – that there was no cheap, surplus power in the state, and that the Hydro could not provide the masses of firming power he required.
If ‘potential’ could be bottled, there’d be no need for us to produce hydrogen.
Over the three years that millions in State money and millions more in Commonwealth grants have been gifted to large corporates to carry out basic due diligence, the reality that Bell Bay can never host large-scale hydrogen production has been apparent to anyone with a cheap calculator.
Just one 300 MW hydrogen plant requires 2,628 gigawatt hours of electricity – which is 24% of the island’s annual production, or over 30% of available hydro power.
Output of 250,000 tonnes of gas is continually cited as initial annual production. One tonne of hydrogen requires 49.5 megawatt hours of power to produce and compress, which means an annual consumption of 12,375 GWh – 20% more than the entire state output.
This reality, so long denied, now underscores the terms for this year’s grants.
“This second round of our Renewable Hydrogen Industry Development Fund will specifically look to fund domestic production and use of green hydrogen at a scale in the order of 5-10MW to stimulate local demand and kick-start this new industry,” Mr Barnett said.
“The development of a domestic market for the use of locally produced renewable hydrogen will play a critical role in establishing a viable renewable hydrogen industry in Tasmania.”
With the hot air now gone, at last this government is promoting something actually achievable on a Tasmanian scale.
It is also a belated acknowledgement that smaller but more entrepreneurial businesses have already started the hydrogen industry rolling in Tasmania. These firms were too dinky to be considered real players a year ago, but this round of targeted funding should speed up their development. Indeed, a stipulation of the grant is that they will actually deliver product.
“To secure funding, proponents will need to be able to commit to commencing production in 2025, provide evidence of their market for the green hydrogen produced and demonstrate a pathway to commercial sustainability.
By utilising small-scale solar generation, both LINE and Countrywide Hydrogen are now on the road to making this new and untried power source available in Tasmania. Both will buy their firming power on a ‘behind the meter’ basis, which mean no initial heavy call on Hydro.
LINE Hydrogen predicts about 600 tonnes per year initially, scaling up in a decade to 5,500t. The plant is under construction, and may see its first output by the end of this year.
Countrywide has two projects – one at Bell Bay, the other at Brighton. Both are 10MW plants, each with a projected output of 4.5 t per day (1650 t/yr).
These producers have identified Tasmania as their market. Innovative plans to lease trial vehicles to local fleet operators is a sensible move which will promote their product, and foster confidence about decarbonisation in our heavy transport and construction sectors.
Unlike the hydrogen-filled zeppelins the Liberals have been trying to get off the ground, it appears Tasmania may at last be ready to float some real party balloons.
Meanwhile, the Port of Rotterdam Authority, keen to source large quantities of green hydrogen for their fossil-fuelled operations, must be wondering what it was that Minister Barnett was selling them when they signed a Memorandum of Understanding with the State Government in December 2021. Was it just hot air?
Greg Pullen is a committee member of the Central Highlands No Turbine Action Group (NTAG) and has a keen interest in renewable energy transformation, in particular its benefits for Tasmania. He is a firm believer in the KISS Principle.
